EU’s Digital Market Acts (DMA), which aims to limit the dominance of big tech companies and make messaging platforms interoperable with each other, will come into effect in the first half of 2023, according to a top official.
Speaking at a conference in Berlin, Margrethe Vestager, executive vice president of the European Commission said, “DMA will enter into force next spring and we are getting ready for enforcement as soon as the first notifications come in.”
Passed in the European parliament in March, DMA will put certain restrictions on big tech companies that will prevent them from abusing the dominant position that gives them gatekeeper powers over smaller companies and developers.
Under DMA, companies with 45 million monthly individual and 10,000 annual business users in the EU will be classified as gatekeepers and will have to follow certain rules. It will also empower the European Commission to investigate and slap heavy penalties of up to 10% on these companies for violations. The fines can go up to 20% for repeat violations.
DMA also aims to give users more power in terms of choosing their search engines, browsers, and virtual assistants. It will also prevent companies from using personal data for targeted advertising only after explicit consent has been provided by the user to the gatekeeper.
“The architecture of the DMA is designed around central enforcement at the EU level, with designated gatekeepers subject to certain do’s and don’t,” added Vestager.
Big tech companies such as Google, Facebook and Apple have been accused of abusing their dominant position as providers of app marketplaces, search engines, and operating systems to force their products on consumers over rivals and charge high commissions for using their services.
According to Statcounter, 63% of the mobile browser market is dominated by Google’s Chrome. Many argue that Google has abused its position as the chief supplier of Android licenses to phone OEMs and forced them into preloading the Chrome browser on their devices.
In 2018, the Commission slapped Google with a fine of €4.3 billion for abusing its dominance in the Android market and bundling its search engine and browser app into the operating system and blocking OEMs from creating devices running forked versions of Android.
In India, the antitrust watchdog Competition of India (CCI) is also investigating Google for promoting its payments service Google Pay and forcing smart TV brands to pre-install Google apps.
Apple is also facing an antitrust case in India for allegedly abusing its dominant position as the app marketplace provider and forcing developers to use its proprietary payment. Some countries such as South Korea have passed laws that require app marketplaces to allow developers to use alternate billing systems.
In April, the EU also agreed upon a separate law called the Digital Services Act (DSA) to make big tech and social media companies more transparent and accountable to users and local laws. It aims to curb misinformation and hate speech and prevent companies from using targeting advertisements on basis of religion, sexual orientation, or ethnicity.